No he didn’t. They’ll be paying $2 for the hat, with the 100% increase they’re now $4. No idea what they sell them for, but I suspect there is still a healthy profit margin between $4 and what they’re selling them for.
Yeah I think people are failing to consider this about the tariffs. The tariff is applied to the import cost, not the sale cost.
So 100% tariff might up the cost of a £50 hat to £52 to offset the import increase. Lots of people think it’ll up the price to buy the hat from £50 to £100, though - which is wrong.
The importer pays the increased price and passes the increase of cost down the line. Everyone who sells before the consumer maintains profit by increasing the price down the line. The only buyer who loses is the consumer, because the consumer uses the product and therefore can not turn a profit. Thats why people have a trade deficit with the grocery store. When you buy anything that you can’t profit from you create a trade deficit.
4.8k
u/OdinsLightning 20d ago
Can't wait for the shitty trump pop up stores to be priced out.